Plasterk offers little to no help to strengthen tax inspectorate

POSTED: 09/16/15 9:49 PM

Instruction: amend budget before October 31

GREAT BAY / THE HAGUE – “Sint Maarten has had ample time to take measures but in spite of promises it has failed to do so every time.” With this argument, the Kingdom Council of Ministers deemed it necessary to give St. Maarten an instruction to put its 2015 budget in order no later than October 31. A budget amendment is already on its way to the parliament but earlier this week, the parliament’s Secretary General Nancy Joubert let this newspaper know that the document had not yet arrived.

Finance Minister Martin Hassink declined to comment yesterday. “I will only react after I have received the official documents,” he told this newspaper.

The Kingdom Council of Ministers followed the advice from financial supervisor Cft with the instruction.

“St. Maarten had to take measures to settle payment arrears of at least 189 million guilders and compensate the cumulative deficits of previous years of at least 60 million guilders in the period 2015 to 2018,” the Kingdom Council of Ministers decided yesterday.

Furthermore, the country has to take measures to keep the health care system and pension provisions sustainable for the future. However, the government gets some more time to make this a reality – until the end of 2016.

The measures to settle the payment arrears and to compensate the cumulative deficits must be established in a budget amendment that has to be approved before October 31 of this year.

“The Cft will assess whether the budget amendment and the proposed measures are sufficient,” the Kingdom Council of Ministers stated in a brief press release.

The council notes that the instruction aims to prevent “that St Maarten can no longer cope with its financial problems.”

To compensate the cumulative deficits alone, the government will have to cut 15 million guilders from the 2015 budget, and a similar amount from the budgets for 2016, 2017 and 2018.

At last count, Finance Minister Hassink said that the draft budget for 2016 was still 50 million guilders above the projected revenue for that year. The instruction forces the ministries to find an additional 15 million in savings.

“They will first have to follow the instruction and tackle the payment arrears and the deficits with a realistic budget,” Kingdom Relations Minister Ronald Plasterk told Caribisch Netwerk reporter Pieter Hofmann after the meeting of the Kingdom Council of Ministers yesterday in answer to the question whether St. Maarten could still contract loans. “That is the first step. It all has to be realistic and it will have to fit within the budget.”

Plasterk referred to the conclusion of financial supervisor Cft that forms the basis for the instruction. “The Cft said that the budget is too optimistic. If you keep doing that you move your problems forward and in that case 2016 is going to become a real problem.”

Finance Minister Hassink has warned that St. Maarten will end up in a downward spiral if the country is not able to contract loans. In particular, Hassink urged to grant a loan for fixing the tax inspectorate.

“If the country abides quickly by the instruction there should not be any problem,” Plasterk said. “Collecting taxes is a responsibility of the country. They have to do that themselves. If they need expertise than I will gladly ask my colleagues whether they will be able to offer support. However, I do not want to create expectations that the Netherlands will make the capacity available to take over a part of the country’s responsibility. That lies primarily with St. Maarten.”